India Is Not Considering Buying Russian Oil In Rupees

India is not considering buying Russian oil in rupees: Rameshwar Teli.

There are no plans to pay in rupees for Russian oil bought by Indian public sector companies. India buys less than one percent of its total oil imports from Russia.

Rameshwar Teli, Minister of State for Petroleum and Natural Gas, said in a written reply in Rajya Sabha.

“At present, there is no contract for Oil Public Sector Undertakings nor for purchase of crude oil in Indian Rupees from Russia or any other country, any such proposal is under consideration.”

State-owned Indian Oil Corporation (IOC) has bought two parcels or shiploads of troubled Russian oil through traders at huge discounts.

The IOC bought 3 million barrels in each trade through European trader Vitol.

Separately, Hindustan Petroleum Corporation Limited (HPCL) bought two million barrels of Russian crude Urals through a trader.

Western sanctions on Russia’s invasion of Ukraine have prevented many countries and companies from buying oil from Russia.

This has made Russian crude available in the market at a huge discount. To take advantage of this opportunity, Indian refiners are issuing tenders to buy such subsidized oil.

Tenders are mostly won by traders who would have stockpiled cheap Russian oil.

From 2020, IOC has entered into a term or fixed volume deal to buy crude oil from Rosneft of Russia.

However, it rarely imported volumes under the term deal, as the cost of transporting oil from Russia made it unviable.

Refiners are procuring Russian crude on a distributed basis to avoid any complications arising out of restrictions in shipping and insurance arrangements.

Sources said trade with Russia is being settled in dollars, as the international payment mechanism has so far been kept out of the purview of Western sanctions.

Also, unlike sanctions imposed by the US on Iran over its controversial nuclear program, oil and energy trade with Russia has not been banned.

This meant that any country or company was free to buy oil and other energy commodities from Russia and use international payment systems to settle trade.